XUSD 280 million explosion will trigger a chain liquidation of stablecoins? Elixir DeUSD has more than half of its Collateral lent to Stream Finance.

Stream Finance stated on the X platform that an external fund manager responsible for managing Stream's funds disclosed a loss of approximately $93 million. To clarify the truth, Stream has hired attorneys Keith Miller and Joseph Cutler from the law firm Perkins Coie LLP to lead the investigation. The team indicated that all deposits and withdrawals will be suspended until a comprehensive assessment of the extent and causes of the losses can be made. The incident has also spread to other DeFi trap protocols, and the DeFi community @yieldsandmore has compiled a list of the implicated protocols, with Stream's total debt amounting to approximately $280 million.

( Balancer chain reaction? Stream Finance exploded with a loss of 93 million USD, xUSD decoupled and collapsed )

Elixir's over half of the collateral value is treated as bad debt, Stream: Unable to pay before clarifying the debt rights.

According to @yieldsandmore's post, Elixir lent about 68 million dollars to Stream Finance on Morpho's Plume: The Elixir Market. Elixir's stablecoin $deUSD has a market value of approximately 121 million, which equates to 56% of the collateral value being essentially non-performing.

Despite Elixir's official claim that “Elixir has full redemption rights on loans to Stream. We are the only creditor with this 1:1 redemption right,” the Stream team stated, “We cannot make any payments until the lawyers determine the ownership of the debt.”

Elixir has a notorious history, with its token down 90% since issuance.

Elixir officially stated in the deUSD documentation that the collateral for deUSD is created by shorting the same nominal value of ETH with stETH ( through perpetual futures contracts to establish delta-neutral collateral positions ) and provide a combination of MakerDAO's USDS. In other words, its revenue mainly comes from fee arbitrage and tokenized U.S. Treasury bonds, and there is a clear roadmap to gradually shift from CEX arbitrage to on-chain exchange arbitrage.

The part that is currently facing a crisis is that Elixir lent USDC to Stream Finance. Additionally, the official documentation mentions that the EBF ( Execution Buffer Fund ) is not meant to cover any losses. It only bears the closing position fees and the gas fees for purchasing tokenized government bonds when the service fee is lower than the government bond yield.

Elixir itself not only has repeatedly delayed its token issuance schedule, but the community describes it as being subjected to PUA. The airdrop has also been criticized for betraying the trust of the community, as deposits on multiple chains for half a year and invitations for users to participate did not qualify for the airdrop. Since the issuance of tokens, the price has dropped by more than 90%, with a TVL of 19.17 million remaining only 1/20 of the peak period's 342 million, marking yet another case of token harvesting. In early March next year, 55.1 million tokens will be unlocked, accounting for about 21% of the circulating supply.

Will the explosion of xUSD 280 million trigger a chain liquidation of stablecoins? Elixir deUSD has more than half of its collateral lent to Stream Finance, first appearing in Chain News ABMedia.